This is simply what a recession is like. This report represents real people and real pain, especially around the holidays. |
Today's employment report is just one month's report, but it's the one we've been waiting for, providing unambiguous good news about the labor market. |
Today's rate cut was no surprise. Even the half-point cut was more or less expected. In fact, the economy is still weak enough for the Fed to feel free to keep easing. |
Unless we're missing something, the unemployment rate will be shooting back up again very soon. |
We have solid job growth, but no significant inflationary pressures. |
We knew that it was a wet month and that rain tends to keep people away from shopping, so I thing a large part of this is actually a weather story. |
We were expecting to celebrate New Year's and instead got slapped with a pink slip. |
We're not only stuck in a soft patch; we're spinning our wheels. To get back to full employment, we need a lot more demand, and that's hard to see coming anytime soon from either domestic or international sources. |
We're still looking at job growth, but not enough to prevent unemployment from rising. If there were no special factors explaining this, it would be a rather dramatic piece of news. |
We're still several months away from job growth catching up with labor force growth and driving the unemployment rate back down, but that's really just a matter of time. Our economy is moving again, and once that happens it's actually quite hard to stop the forward momentum. |
We've gotten to a point now where inflation is something which, for the most part, we don't really think about. And I guess that's exactly the way [Federal Reserve Chairman Alan] Greenspan wants it. |
Weak employment growth but higher hourly earnings point Greenspan and the Fed in two different directions. Either the economy is slowing down and the Fed needs to sit tight, or inflation is starting to take off and another tap on the brakes may be necessary. |
What worries me the most is a slip backward becoming a spiral downward. Jobs are the linchpin of both consumer confidence and consumer spending. We can't sustain many more losses like this without that downward spiral getting started. This is the kind of data that could make the Fed think about easing again. |
When demand does start to rebound, the Fed will have to deal with the delayed effects of a year of aggressive monetary stimulus. Short-term rates will almost certainly have to rise faster and farther than seems credible today. Of course, this is a problem that we now feel we would enjoy facing. |
While the labor market may feel like the weakest link in the recovery, really it's the last link. As long as employment doesn't collapse, the recovery will continue to gain strength. As it does, slowly jobs will be added and they will be the fuel that kicks the economy into a higher gear. |